analysis of consignment contracts for spare parts inventory systems
How to Optimize Your Maintenance Spare Parts Inventory
9
effective executives, efficient employees A VETERAN OWNED SMALL BUSINESS StrategyDriven TM Optimizing Inventories Through Improvements to the Work Management / Supply Chain Interface Nuclear Operations and Maintenance Efficiency Summit 16 November 2015 www.StrategyDriven.com/wmscinterface
-
Upload
nathan-ives -
Category
Business
-
view
323 -
download
5
Transcript of How to Optimize Your Maintenance Spare Parts Inventory
effective executives, efficient employees
A VETERAN OWNED SMALL BUSINESS
StrategyDriven TM
Optimizing Inventories Through Improvements to the Work Management / Supply Chain Interface
Nuclear Operations and Maintenance Efficiency Summit
16 November 2015
www.StrategyDriven.com/wmscinterface
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 2 StrategyDriven TM
effective executives, efficient employees
StrategyDriven Advisory Services StrategyDriven advisors serve the global Energy Industry
United States
Canada
Brazil
Peru
El Salvador* Companies served over the course of our advisor’s careers and not necessarily through StrategyDriven.
In 2014 alone, StrategyDriven advisors identified $200+ million in inventory
reduction opportunities across four companies!
Just imagine what we might do for yours.
*
United Kingdom
Norway
Switzerland
Hungary
Cayman Islands
United Arab Emirates
Angola
Nigeria
Australia
Japan
Thailand
Singapore
India
Industry Experience
Power & Utilities
Oil & Gas
Healthcare
U.S. Navy
U.S. Army
Not-For-Profit
Global Client Experience
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 3 StrategyDriven TM
effective executives, efficient employees
A Challenging Economy The ongoing economic malaise pressures utility managers to hold down costs
Economic demands place increasing pressure on utility managers to reduce costs while
maintaining high levels of operational safety, reliability, and efficiency. For Work
Management and Supply Chain leaders, areas of potential savings lie with:
optimizing inventory levels while reducing associated carrying costs,
minimizing or eliminating expediting costs, and
eliminating losses incurred as parts become obsolete in the warehouse
… while providing the highest level of parts availability.
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 4 StrategyDriven TM
effective executives, efficient employees
Inventory CharacterizationIdentifying achievable inventory optimization
Total Inventory
Inventory Restocking
Over Max Inventory
Temporary Over Max Inventory
High Economic Order Quantity Item Over Max Inventory
Frequently Used, Long Lead Time Item Over Max Inventory
Cost of Doing
Business Over Max
Inventory
Inventory Reduction
Opportunity
High Reorder Point Over Max Inventory
Late Item Ordering Over Max Inventory
Total Inventory
Reduction Opportunity
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
(mil
lio
ns
)
Upward Pressure on Inventory Levels
While every utility’s circumstances are unique,
StrategyDriven advisors commonly observe
$10+ million in inventory optimization opportunities.
Illustrative
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 5 StrategyDriven TM
effective executives, efficient employees
Industry OpportunitiesStrategyDriven WM – SC evaluations reveal numerous program misalignments
Existing utility industry guidelines and evaluation groups commonly ignore the highly
integrated relationship between the Work Management and Supply Chain programs.
Consequently, the constraints and limitations each program has on the other is frequently
overlooked resulting in transaction disruptions and redundancies that result in elevated
costs.
In our experience, organizational, process, and technological barriers between the Work
Management and Supply Chain processes disrupt the flow of information that would
otherwise facilitate timely error-free transactions.
Organizational Challenges
Process Challenges
Technological Challenges
The New WM-SC Paradigm
The Supply Chain organization is an integral partner in the execution of the
work management program
Work Management and Supply Chain processes are co-developed and
interdependent
Work Management and Supply Chain performance metrics and reports are
linked and evaluated in combination with one another
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 6 StrategyDriven TM
effective executives, efficient employees
Opportunities for ImprovementStrategyDriven identified opportunities to align WM – SC processes
Based on work performed with a broad number of nuclear and non-nuclear electric
generation utilities, StrategyDriven advisors have previously identified the following Work
Management – Supply Chain interface issues:
Parts ordering occurred within the lead time of needed parts
Component lead times were observed to change frequently without being updated
within the supporting supply chain application
Enterprise resource planning system algorithms were not used
Supply chain personnel are not actively involved in the work management process
Inflated stocking logic parameters
Potential Cost Savings Opportunities
Inventory reductions of 10 – 25 percent
Expediting cost reductions of up to 90 percent
Significant reduction in inventory spoilage and obsolescence
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 7 StrategyDriven TM
effective executives, efficient employees
WM – SC Interface AssessmentHow to uncover Work Management – Supply Chain interface misalignments
Plan & Prepare Collect DataInterview &
ObserveReview & Analyze Conduct Briefings
WM Process Framework Phase-by-Phase WM
Process Assessment
WM & SC Time-dependent
Process Execution
Assessment
Item Lead Time Accuracy
Analysis
Work Management
Maturity Model
Review Work Management and Supply Chain processes for interface misalignments
Analyze Work Management and Supply Chain performance data for quality and
process performance inefficiencies and misalignments
Observe the performance of and information flow supporting work planning; parts
ordering; procurement processing; and parts receipts, issues, and returns
Assess Work Management and Supply Chain process supporting applications for
information access and flow
Optimizing Inventories Through Improvements to the WM – SC InterfacePage 8 StrategyDriven TM
effective executives, efficient employees
ContactFor more information on how to optimize your spare parts inventory, contact…
Nathan Ives
Principal
StrategyDriven Enterprises, LLC
(678) 313-0150
or visit us on the web at:
www.StrategyDriven.com/wmscinterface
StrategyDriven Enterprises LLC
1720 Mars Hill Road, Suite 8-232
Acworth, Georgia 30101
(678) 810-0892
StrategyDriven TM
StrategyDriven.com | StrategyDriven Professional | StrategyDriven Advisory Services
StrategyDriven refers to the family of organizations comprising StrategyDriven Enterprises, LLC.
For more information about our company, please visit www.StrategyDriven.com.
StrategyDriven is the trademark of StrategyDriven Enterprises, LLC.
Copyright © 2015 by StrategyDriven Enterprises, LLC. All rights reserved. A VETERAN OWNED SMALL BUSINESS
StrategyDriven TM
